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Gold/Mining/Energy : Copper - analysis -- Ignore unavailable to you. Want to Upgrade?

To: DaveAu who wrote (1518)	12/4/2006 2:27:13 PM
From: Stephen O	Read Replies (1) \| Respond to of 2131

Chile: Repair of Collahuasi mine may reduce copper production Source: Easy Bourse Copper Concentrate CatalogA key mill at Chile's 425,000-metric-ton-a-year Collahuasi copper mine may be taken off for repairs lasting around 70 days from January, which could cut production by up to 30,000 tons, the chief executive officer of Collahuasi's operating company said. "We have not made a firm decision when we will do the repair but we're not ruling out January 2007 as a possibility," Collahuasi CEO Thomas Keller told. Collahuasi is a 100%-owned subsidiary of London-listed Xstrata Plc, Anlgo American Plc, which each hold 44% in the mine, and a Japanese consortium headed by Mitsui & Co. Ltd. The $8-million repair to one of the mine's three SAG mills, which accounts for 45%-50% of ore throughput, has been on the cards since the mill's motor broke down in 2005, Keller said. "The motor broke down in 2005 and underwent a temporary repair, so a replacement of the unit has been planned since and we have contingent repair contract with ABB. The difficult part is to decide when to do it, which depends on copper market conditions and production conditions," Keller said. A period of high ore grades in the mine plan would help to offset production losses but Keller declined to outline likely future ore grading. "Key to our decision when to do the repair will be ore grades," Keller said. He said there was limited capacity to shift ore to Collahuasi's other two mills during an outage, which could amount to a production loss of 100,000 tons of copper concentrate, the precursor to refined metal. An Xstrata spokeswoman confirmed there was a problem with one of the mills and that it would be taken off for repairs at some point. "The copper concentrate market has been tight for the past two years and this shutdown could be quite important while the market is perceived to be pretty tight," copper analyst Peter Kettle at consultancy CRU said. "There is a lot of new smelter capacity coming on stream but not much new mine capacity over the next year so the market will remain in favor of miner," Kettle said.